Higher education reform to back opportunity and protect students

The government has today (4 November 2024) unveiled a significant package of measures to support students and stabilise the university sector.  

Students facing cost of living pressures will be supported with an inflation-linked increase to maintenance loans, alongside new steps to boost access for disadvantaged learners.    

The increase in cash-in-hand support of 3.1% will provide as much as £414 extra per year, to help students from the lowest income families.   

Higher education providers’ financial sustainability will also be bolstered, after seven years of no increases to domestic tuition fee caps – meaning fees have not kept pace with inflation.   

These changes will take effect at the start of the 2025 to 2026 academic year, with maximum fees rising by 3.1% to £9,535. After leaving study, student loan borrowers will not see their monthly student loan repayments increase as a result of these changes.   

If a borrower’s income is below the repayment threshold, they aren’t required to make any repayments. And after 40 years any outstanding loan debt, including interest accrued, will be written off.   

Education Secretary Bridget Phillipson said   

This government’s mission is to break down barriers to opportunity, which is why we are doing more to support students struggling with the cost of living despite the fiscal challenges our country faces.

The situation we have inherited means this government must take the tough decisions needed to put universities on a firmer financial footing so they can deliver more opportunity for students and growth for our economy.

Universities must deliver better value for money for students and taxpayers that is why this investment must come with a major package of reforms so they can drive growth around the country and serve the communities they are rooted in.

In exchange for this additional investment students are being asked to make, the government is calling on universities to significantly step up work to boost access for disadvantaged students and break down barriers to opportunity.   

Providers will be expected to play a stronger role in expanding access and improving outcomes for disadvantaged students, and the department for Education will announce a package of reforms in the coming months.  

Recent data shows that the gap between disadvantaged students and their peers in progression to university by age 19 is the highest on record, and the Education Secretary has called on universities to do more to address this.    

Graduates earn an average of £100,000 more over their lifetime than non-graduates, underlining the continued value of a university degree to employers and learners alike. But these statistics have shown that that too often background and personal circumstances are barriers to people getting on in life.   

The increase in fees will mean providers can start to address systemic problems, with 40% forecasted to be in budget deficits, and help ease pressure on their finances. It also means providers can continue to deliver high quality education that boosts the life chances of those who choose this path, as well as protecting their status as engines of economic growth.   

The move follows the Education Secretary’s immediate action this summer to refocus the Office for Students’ role, and ensure it more closely monitors financial sustainability to safeguard the future of higher education.    

The Education Secretary has also announced today that maximum tuition fees for classroom-based foundation years courses will be reduced to £5,760 from the start of the 2025 to 2026 academic year. This will ensure that courses are delivered more efficiently and at lower costs to students.

The announcement follows last week’s update to plans for the Lifelong Learning Entitlement (LLE), a transformation of the student finance system which will expand access to high-quality, flexible education and training for adults throughout their working lives.  

After careful consideration the LLE will now launch in academic year 2026 to 2027, to ensure it meets the government’s ambitions to fill skill gaps and kickstart economic growth.   

This will enable plans to be refined, help collaboration with Skills England to support the government’s industrial strategy, and give education providers the necessary time to prepare for this new system.

Further information on fees

The latest Q1 2026 RPIX forecast of 3.1% gives the following uplifts to fees and maintenance loans for 2025 to 2026.

Note Figures rounded down to the nearest £5 – figures are higher amounts.

Note Figures for full-time students not eligible for benefits and part-time students (100% FTE). Figures rounded to nearest £1.